Management and admin make up between 1 in 3 to 1 in 4 in a typical company (25-33%). They are on average paid more than the “direct” staff, they receive greater perks (cars, healthcare, pensions…Continue

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Yes I think so. But not a particular discipline as they tend to be just subsets of the difficulties that face us in life. Often along with a single discipline comes a tendency for over focused “detail thinking” and simplified ideas of cause and effect.

In other words reductionism and determinism.

If your heating breaks down and you are cold you could call a boiler man, a plumber or an electrician. Each will just use their bounded skills to identify and resolve the problem. A polymath would be better.

The type of education I believe is necessary is more pluralistic, a more holistic one, producing polymaths.

Design is an area where wider considerations are forced upon you, but I would not consider designers (or architects) as totally enlightened. Entrepreneurs are not special, they just have wider boundaries.

It sounds as if you were already on a 'lean journey'. How did that start? Did it not provoke some paradigm shifts for you and others?

We were forced on our lean journey by our industry. At the top of the aerospace industry contracts were awarded on the proviso that productivity was increased- plus money was made available to train the lean stuff. We were “enrolled” on lean training and it cost us £30k and half the savings that were identified were taken by our customer as price drops. Of course, these were not savings as they appeared on the bottom line, just theoretical ones. We lost both ways- it cost us money and didn’t deliver any real savings and our prices were pushed down. The lesson- lean is a scam.

But in time it did pay off. Just not directly.

First, I just couldn’t find fault in any particular lean tool, that led me to the conclusion that something else was failing. I read lots about lean, but they were all western books. It was only when I read Taiichi Ohno’s book “Toyota Production System: Beyond Large-Scale Production” that the subtle background of lean became apparent. It is more about culture than about tools, and that is why Toyota themselves get a much worse result with their lean operations in the UK than they do in Japan. It’s a book very much worth a read and very much worth thinking about at length.

Ohno is a subtle writer- it’s the Japanese way, there are big statements in small words. I loved the details of the management structure of Toyota- you can actually calculate the management overhead from the text- and it’s BIG.

My paradigm shift was to focus attention away from the tools of lean and onto the cultural “nest” that those lean tools need to work properly. This was where the can of worms was hidden- perhaps Pandora’s box is a better metaphor.

But I'm not paid to worry about that

If you were, could you really do anything about it on your own?

But practically, like us all, you need to keep the monster fed (earn money).

In our way we found evidence of the same issue in our data, we looked for a correlation between individual total income and process through-put. We found that there was none. Throughput, profit, mix, market seasonality and process changes were not correlated with total individual income. Whilst all these varied considerable and there was inter-correlation between the variables, however the total individual income followed an un-correlated, very regular, level- even showing earnings following their own regular heartbeat reaching a peak prior to and after Xmas and their summer holiday. This heart beat reflects the spending demands of the individual, and not the labour demands of the business.

Fascinating data.

Not many conclusions that can be drawn except that overtime was not serving its purpose for the business.

We cut this “rope” by banning overtime but offering a bonus instead. A bonus for nothing.

We identified the overtime pattern of each individual and offered them an identical bonus instead- in return for no process backlogs.

Within 6 months process backlogs had disappeared and no overtime was being worked- and pay remained the same. Eventually as we pushed for higher productivity we folded this bonus into basic pay and provided further bonus linked to increased productivity.

My reservation probably reveals more about me than any insight into your approach. I know a sometimes appear (sometimes am) naive, placing great faith in the power of teams to sort out any issues relating to individuals. This may be what you are saying, with me substituting 'team' for 'system'.

Ha! We are all naïve, David- you’re not so special- it’s the situation we all face if we choose to grow. We must push ourselves into things about which we are naïve- it’s a healthy sign.

Hmm, I don’t think our system can sort out issues relating to individuals, I think individuals must do that. The system must not support, encourage or perpetuate these issues, this leaves their existence entirely at the door of the people in the system- not the system itself. This is what I mean by the system being a “corral”. It does not tell the individual what to do, but neither does it support dysfunction. Instead, it leaves individual issues at the feet of individuals who are the only ones who can resolve it. The problem with the “team” approach is that it can descend into the “tyranny of the masses” as unpalatable social pressures are applied to members and problematic and destructive personality traits can dominate (bullying for example).

I'm always interested to know the particulars behind a metaphor but I find they can often be rather bland and seldom transferable because we are highly creative and individual about the ways we get stuck.

Ok, I’ll present an example of an anchor. We paid overtime- time and a half. When we were busy, people would work extra hours to catch up with the backlog. Overtime is a common strategy in many companies even in large so called Lean companies like (left out name as I will elaborate on what happens on the ground and don’t want to single them out as unique)- it is far from an archaic practice.

How is overtime an anchor? Well, in so many profound and elaborate ways. It is a massive influence on culture- and a really good example of the power of environmental psychology.

Overtime is inherently linked to productivity not demand. One might imagine that if a company has little work then there would be no overtime- but this is not true, consider the “theory of constraint”- no matter what the throughput, there will always be a bottleneck somewhere- and this is an overtime opportunity. The problem of the theory of constraint is that it conceptually fixes the capacity of each process, however processes are run by people and people are not fixed. Thus the problem is the theory suggests that each bottleneck is resolved in order of it’s effect on throughput. But the reality is that the overtime that the bottleneck provides is essential for the financial stability of the staff. Thus there is a moral dilemma for the worker, who takes priority- who is more important- family or company? So how can staff maintain overtime whilst helping resolve the bottleneck? Actually that’s quite easy. Every process is fraught with difficulties, people use their skills to overcome these difficulties everyday. These are activities that are not written down and recorded and are part of the indispensability that staff value so highly to provide themselves with security (another anchor). So it is quite easy to let your process stumble and quickly build up a pile of WIP sat in front of your machine. And your overtime is determined by the urgent WIP in front of your machine. Surely this can’t happen in a “Lean”, “pull” style environment. On a trip to probably the most efficient car plant in Europe I witnessed this very practice going on, and it went on everyday. The company had a rule whereby there was 2 hrs gap between shifts. This 2 hours were used for 15mins of maintenance and 1¾ hrs of paid “overtime”. This overtime was used to catch up if the line had been delayed for quality reasons. Over each assembly station on the line was a large digital display that showed real time metrics- one of which was the total delay time of the line for that shift. As we walked on our tour the line was busy but there was a cacophony or ringing phones. Our guide pointed out that the noise was not in fact phones ringing but the unique ringtone of each assembly station that was used to summon the quality team who would rush to that station to help remedy the problem and get the line running again. There were two quality teams and lots of ringtones. The line stopped until the quality team had resolved each issue. Our guide explained how successful this system was as the noise represented quality being maintained. How coincidental that they were always capable of identifying and sorting all the quality problems of the day within the allotted 1¾ hrs never exceeding it- but they always needed it –everyday, every shift. The guide was even open enough to reveal that when the line had been delayed by 1¾ hrs there were very rarely any additional problems identified.

Guess what, there is a culture of in this super LEAN workforce of manipulating overtime. It’s there in the data.

Although as far as people leaving goes it was a slow process. People evaluate the how much responsibility they are required to bear along with how much pay they get. The bargain must be equitable. However people don’t have the same capacity for responsibility, everyone is on a spectrum of responsibility, so if the role demands more responsibility than they are capable of, the job becomes untenable for them. This can be a bone of contention in a traditionally organised company, however in a company with integrated functions your responsibility lies only for yourself. It’s difficult for the individual to suggest that being responsible for himself is too much to be expected to bear.

So people left, one at a time, as the levels of responsibility that the system demanded rose, and they reached their personal limit. We always paid more than the responsibility warranted.

The good thing was we could always recruit good people at this higher wage rate, people who were more comfortable with greater responsibility.

As an over view I was very much a theory Y kind of guy and my business partner is very much theory X type. Neither work. Both are deeply flawed. Theory X requires a large margin in the work to pay for the level of control necessary in a simple low tech business, and this level of control hits a complexity barrier when the business is high tech and needs to change rapidly to remain competitive.

On the other hand, although Theory Y can delegate this control down to the front line and just get out of the way- there is no guarantee that the people on the front line have the capacity for that control- or to be successful in it. The theory Y manager can fall into a trap of thinking he is responsible for the success of the people who are in his charge. Both theory X and theory Y have fatal flaws.

The sailing ship metaphor is lovely. Captures the Deming notion that the manager's job is not to make things happen but to remove the obstacles that are preventing them from happening. I'm always interested to know the particulars behind a metaphor but I find they can often be rather bland and seldom transferable because we are highly creative and individual about the ways we get stuck. A profound insight for me may be trivial to you which is partly why you never thought to mention it.

"The culture sounds a little bit individualistic but I can't imagine you would get the results if it was really like that.

I’m not sure what you mean by that, could you elaborate?"

This is one of the pieces that jarred a little with me: "Our business management system creates a boundary around an individual, provides a mechanism to interact with others and holds the individual to account for their choices." Holding people to account makes me think of command and control although you go on to explain: "No one in the system tells another what to do, each must choose, and live with the consequences."

My reservation probably reveals more about me than any insight into your approach. I know a sometimes appear (sometimes am) naive, placing great faith in the power of teams to sort out any issues relating to individuals. This may be what you are saying, with me substituting 'team' for 'system'.

I also like your onion metaphor but have found that the transition between some layers is more blinding or more obvious than others. I've been wondering if the kind of insight we've been discussing is covered in any particular form of education or if those educated in a particular discipline might be more open to it. Speaking as a recovering engineer, I can attest that several sharp blows to the back of the head were required before the pennies started to drop.

I've heard it suggested that architects may be more open to systems thinking and I wondered if your background in design may have warmed you up? It sounds as if you were already on a 'lean journey'. How did that start? Did it not provoke some paradigm shifts for you and others?

(I have to be careful not to get too distracted by all this as I am in 'full time' employment. Behind my interest is great frustration that the terriffic little company where I work is severely hampered by the owner's unshakeable confidence in his own brilliance! But I'm not paid to worry about that.)

No. not so much avoid, but they would take the mic about our obsession with the soft social stuff rather than the “proper aspects of business”. We did give up with them eventually when they just weren’t really willing to think. The last straw was when we got a presentation by an accountant about some accounts analysis software that completely failed to address where the problems were coming from -but rather suggested understanding the numbers would really improve prospects.
When they got really excited about that we left.

How long did it take for people to realise something was changing?

Hmm, two years to really change the place enough to test our ideas and another two years to fix the things that were stopping us improving. Let me put some detail around this. Having established a philosophical basis that we could progress with (a year of argument and experiment) we were still stuck with the yawning gap between where we were and where we wanted to be. A gap analysis followed, but that did not mean we could simply start pursuing our plan. The business had to be kept alive in the process which meant of all the things we WANTED to do there are very few that we could ACTUALLY do- and that’s if we were lucky- there was often nothing we could actually do that we wanted to do- all that’s left is to take a step that simply gave us more options.
Eventually, step by step we got enough of the new system in place to make a difference….and … not much happened.
Careful examination revealed that there was nothing wrong with what we put in, but rather the things that were still in place from the previous model- things we had not taken out- were preventing us moving forward.
It took two years to pull out those weeds- we had a metaphor of a sailing ship that had put up all its sails and lifted the anchor but didn’t go forward. On examination every part of the tangle of ropes on deck eventually led overboard to a hidden anchor. All of the anchors had to be lifted before we could get underway. The sails are not enough. Actually- we started dragging the last few anchors as the improvements overwhelmed the resistance.
After removing the last few, performance increased radically.

I hope my questions aren't impertinent.

Not impertinent at all, good insightful enquiry that I’m happy to share. It’s good to communicate with someone who has a powerful perspective. It’s never about persuading another- it’s about exploring something robustly. I may always take a contrary view, but I think “how can a view be tested without it being put in contrast to something?”

For me, this is the challenge of our network. Plenty of traditional managers run their traditional businesses into the ground without ever discovering any flawed assumptions in their own thinking. I believe that what unites the members of the AMED community is a shared experience of having been wrong about something pretty important. We've discovered fatal flaws in at least one deeply held assumption. And if we've been seriously wrong once, it's a short step to discover how little we know. This is an insight which transforms our own lives but is very hard to pass on.

Wow, yes I totally agree. We learn through failure and we learn by replacing either no knowledge or broken knowledge. Those who fail the most have the opportunity to learn the most. My biggest asset is a business partner who will just explore and explore till he gets to something useful.

So ... how has that been for you? Awful. Both the best and worst experience of my life.
It pushed me way beyond where I thought my limits were; in the darkest hour things just got worse! But I reflect positively on my strength during that lost period, and ultimately it led to me discovering something better. I wouldn’t give it up for the world, but it was umm- character forming to say the least.

Did your employees think you'd gone mad? Did many leave?

Yes, and Yes. They all left. I’m the only one who stayed.
The environment we previously crafted had systematically selected people whose vision, values and responsibility were in stark contrast to the demands of the new environment we were introducing. They now had to change. We never needed to sack anyone or indeed fall out with them, however time came where they had better options elsewhere. We all have choices, you can offer people a better deal, but it is up to them to choose to take it. The pain of change can be a price too high even if it’s logical. We made sure they were all given the time to find better jobs rather than leave straight away- after-all it was us that was changing.

If I read you correctly, the catalyst "was reading about the modern science of designing enclosures for animals held in captivity". Was that a blinding flash of the obvious? A dramatic 'Ahaaa!'? Or some more subtle process? Was it just reading? Were their also conversations? How long did it take?

Well, they are interesting questions; I’ll work backwards- it has taken 10 years and we are still not finished. It just gets better and cheaper. Even before we put anything in place we had nearly a whole year of arguing, that’s because of my background as a designer; I knew we needed a sound basis on which to base any program and a clear view of our destination. There was no point in just putting good ideas on the ground as quickly as possible- our lean journey had also taught us that that didn’t work. No, a sound philosophy was essential. Exploring a philosophy is like peeling an onion.
Imagine that breaking thru each layer of the onion into the one below always needs a “blinding flash of the obvious”- or rigorous experimentation or exploration.
The “animals in captivity” story I used was an introduction to the concept of environmental psychology. It’s a difficult concept to introduce so that’s how I did it. I guess I realised that “animals in captivity” reflected this approach as I was exploring the concepts of environmental psychology- but in truth I was more focussed on the question of the environment supporting the expression of the natural behaviours of the animal in captivity. I was confronted by the question- what are the natural behaviours of humans?
As an example of the layers of the onion:
There was a “blinding flash of the obvious” when we understood that behaviour is determined by the vision, values and responsibility (VVR) of the individual not from instructions and standards.
This in turn led to the “blinding flash of the obvious” that people, being social, take their primary behavioural constraints from the culture around them (the VVR of those around them).
This in turn led to the “blinding flash of the obvious” when we understood that culture is therefore something that cannot be measured or influenced directly as it is a shadow and a sub-set of inner VVR of the individuals.
So whilst we couldn’t influence culture directly, nor the VVR of the individuals, we could create an environment that rewarded the expression of healthy VVR (in terms of measures of value to customer and company). This in turn affects culture, which in turn affects measurable behaviour- a virtuous circle.
The vision, values and responsibility of an individual have a huge influence upon the level of intervention (magic) that people bring to bear on the difficulties they face in their environment.
This magic is also known as “adding value”.
As for books.
Initially I read loads and loads, like the Goal, Lean stuff like the Machine that changed the world, etc etc. I had a business almanac that was one and a half million words long. None of them really improved my thinking.
In the end there are probably 6 books that really changed my views. So reading was essential, but books are written to sell, so often they don’t promote anything that is not already known- popular repackaging is more the way.
And as a reader you are not going to get much from stuff you already know. The problem was that the stuff was too isolated, too disjointed to be of practical use. Again, just a bunch of good tools. The tools are not the issue- it’s the mechanic that fixes the car who is key. The mechanic must be able to view the car as a system and understand the fault in its context.

Hi, Julian. It's hard to keep up. I can tell that your company must be running itself because you have all this time to write!

Ha David, yes you are right, I don’t have any day to day activities in the business anymore, my role is simply to review the proper running of our system and to look for ways to make it better. Leaves me quite a lot of spare time! That’s what a system that promotes autonomy looks like. I have to live with the anxiety that promotes in me.

I read your 'Fit for Purpose' and find myself pretty much in agreement.

I can’t expect you to be in full agreement and that would not serve either of us. Although I have to say I had lots of dearly held beliefs and perspectives that have shifted as a result of our journey- and they took a lot of effort and upset in me to shift them.

The culture sounds a little bit individualistic but I can't imagine you would get the results if it was really like that.

I’m not sure what you mean by that, could you elaborate?

In principal it reminds me of the argument in favour of long term growth rather than short-term growth - the point is that long term growth cannot be achieved in the absence of short term growth. So, in the same vein -how can a business have good results without the individuals in it producing good results? I argue that individuals with good results combine to make teams with great results and a business with magnificent results.

What I'm really interested in is your own learning and how you've got on with trying to pass it on. Miserably. Even though I’ve been on a steep learning curve and have been very open to people about the lessons learned and the results achieved- warts and all, it never really gets embraced even as an idea. People often react positively to those bits of our concept they like- however are usually quite dismissive about the program as a whole. It doesn’t bother me so much as they are the losers- but I wish I could get people to think more about their situations. That’s the only way they are going to get better (no matter what they do).